HBOS comes to aid of Rocco Forte Collection

Sir Rocco's hotel group has avoided a cash flow crisis [Getty Images]..

Sir Rocco Forte’s Rocco Forte Collection has avoided a cash flow crisis following an agreement by HBOS, part of Lloyds Banking Group, to extend a £300 million loan pending a long-term solution, according to a report in The Times.

The paper stated it was understood that the hotelier held urgent talks with HBOS last year after the downturn put the company’s joint venture with HBOS, encompassing seven of its thirteen hotels, in breach of financial covenants.

Italian bank UniCredito are also involved with a refinancing of an additional £80 million loan taken out to develop the Verdura Golf & Spa Resort, in Sicily, which opened last summer but closed in October due to poor occupancy, however it is set to reopen in March.

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With a recent improvement in trading, HBOS agreed an 18-month extension to the combined £300 million facility and in return the hotel company has agreed to a higher rate of interest.

The Times added that it was also believed that the Forte family, which has invested £65 million in the business since its launch, has not been asked — or offered — to provide fresh equity.

A debt-for-equity swap, which would have narrowed the family holding, has also been ruled out.
Analysts told The Times that Rocco Forte Collection’s position was not as extreme as many competitors.

Debt worth several billion pounds is likely to be written off in the coming months as hospitality companies, including the Alternative Hotel Group, Marriott Hotels UK and Queens Moat Houses, complete severe restructurings.

Sir Rocco declined to comment to the paper on the matter.